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Here's Why BP Signs Accord to Acquire Wind Farm in Indiana

BP plc BP recently announced an accord to acquire the remaining 50% ownership stake in the Fowler Ridge 1 wind asset in Indiana.

Notably, the wind farm with 162 turbines, having capacity to produce 300 megawatt (MW) of energy, has been acquired from Dominion Energy Inc (D). However, the financial aspects of the deal have been kept under wraps. The transaction is expected, subject to regulatory clearance, to conclude by 2020-end.

The British integrated energy player also has operating ownership in Fowler Ridge 2 and 3 wind farms. Notably, the latest agreement, once completed, is likely to boost the net wind energy generation capacity of the energy major by more than 15% to 1,076 MW.

Overall, the investment reflects the company’s strong focus on renewable energy generations since investors are increasingly pressing oil companies to drastically reduce carbon emissions, which is in line with the Paris climate goals.

The company also plans to invest $70 million in Green Growth Equity Fund (“GGEF”) of India, as announced on Jul 7. The fund, being promoted by the India’s National Investment and Infrastructure Fund (NIIF) and the government of U.K., was established in 2018.

Notably, after the completion of the investment, India’s GGEF will be more focused on scaling up growth in zero carbon and low carbon energy solutions in the nation. Importantly, the investment is not only going to help India significantly lower greenhouse gas emissions but will also create a platform for the British energy major to invest alongside GGEF in many low-carbon projects in India that are commercially viable. The investment will also make BP a limited partner in GGEF and enable the company to represent on the advisory committee.

The fund, comprising investments from the governments of India and the U.K., has a target to reach roughly $700 million in investment commitments. Overall, with the investment strategy, BP is not only committed to reimagining the energy scenario for India but will also advance to become a net zero emission company by 2050 or sooner.

Nevertheless, BP is not the only company investing in non-oil businesses like renewable energy to align goals with the Paris Climate Agreement. Royal Dutch Shell plc RDS.A is another key energy firm planning to become a net zero emission energy firm by 2050. Eni SpA E is also committed to renewables for a cleaner future.

BP p.l.c. Price

BP p.l.c. Price

BP p.l.c. price | BP p.l.c. Quote

BP currently carries a Zacks Rank #3 (Hold). Meanwhile, a better-ranked player in the energy space is Viper Energy Partners LP VNOM. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Viper Energy has witnessed upward estimate revisions for 2020 bottom line in the past 60 days.

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